Friday, June 20, 2008

SMEs - can we create entrepreneurs

The whole world has gone from seeing SME's as an inconvenience, to seeing them as the salvation for developing as well as developed economies.

One has to question whether this is possible. While there is no doubt that SME' s are able to play an important part in economies, the confusion that I believe is arising, is the misperception that SME owners and entrepreneurs are one and the same thing. If we consider the USA as an example, the entrepreneur is considered in an extremely positive light. The number of SME's exceeds 25 000 000 to the best of my knowledge. However, I believe the bulk of these are not entrepreneurs. They are predominantly SME owners who bought a franchise.

The franchisor carries out the two mission critical aspects of owning a business, and which differentiate the entrepreneur from the SME owner. These are strategy and marketing. It is the business strategy and marketing which make the business unique and entrepreneurial, but the franchisee has no control over these.Therefore the owner of an SME is not by default an entrepreneur, and the fact that they might be a franchisee diminishes that possibility even further.

Therefore should governments be investing vast sums of money to create SME's, or should they be investing in entrepreneurs who will in fact create the SME's. I believe we need to become better focused on how we spend our money in order to create more quality entrepreneurial businesses.

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